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Monday, June 25, 2012

The Health Care Reform Debate: Shame of a Superpower

It’s often asked how people can vote against their own best interests. As a social phenomena, this strange, pathetic quirk of democracy is being played out before our eyes in the healthcare debate.

For a nation that once prided itself in being a leader among nations, with a system of governance to be admired and imitated, the whole thing has been one embarrassment after another.

First the good news.

According to provisions in the Affordable Care Act (ACA), better known as Obamacare, health insurers that covered large groups were required to spend at least 85 cents out of every dollar on medical care or “activities that improve health care quality.”

This provision became effective last year and its
implementation is now producing real results. Insurers who spend more than
allowed on expenses other than patient care will be required to compensate policy
holders. Meaning, policyholders can expect to see a rebate check in the mail
before August 1 2012.

The national average for each family with private
coverage will be $151 but that average varies a great deal state by state. More than 120,000
Colorado families, for example, should expect see rebates averaging $227.
About 244,000 in Georgia will get $19.8 million, averaging $134 per family, according
to a report from the U.S.
Department of Health & Human Services. In Massachusetts, about 164,000
people will be compensated by insurance companies with each family averaging
about $140 per family. And for those who receive their health insurance through
their employer, the rebates will be sent to their employers. Employers are then
required to either pass the rebate on or apply it in a manner that benefits the
employees.

All told, according the MedPage Today’s Washington Correspondent Emily Walker, health insurance will be obliged to fork over a staggering $1.1 billion in rebates to some 12.8 million policyholders. Without these ACA provisions, these rebates would have been pocketed by insurance companies as administrative costs, profits, or surpluses.

In an effort to win the battle of public opinion, insurances companies have
gone all out in a media blitz. Chris Frates writing for National Journal recently reported how health
insurance companies had passed over $100 million to the US Chamber of Commerce
for advertising to turn public opinion against the healthcare reforms and to
elect lawmakers who have pledged to repeal the whole program.

This is on top of some $7 million that, health insurance company ATENA had
already given to the Chamber and to American Action
Network (AAN) an issues advocacy group. AAN is a 501(c) 4 organization and as such, is just, another example of the Right’s questionable use of the 501(c)4 tax exempt status. That exemption is supposed to be reserved for civic leagues and other corporations operated exclusively for the
promotion of social
welfare.

Social welfare, in this case, means exploiting the Citizens United decision.

The money is significant for many reasons. First, the disclosures reveal that both the Chamber and American Action Network’s public claims about their identities are completely disingenuous. The Chamber claims to represent thousands of small businesses, so when the public saw the $75 million in electioneering ads or the tens of millions in general anti-health reform ads aired from 2009 to 2010, most probably assumed these ads were representative of the views of the business community. In reality, almost all of the money came from multinational insurance and financial conglomerates hoping to influence policy.

Fifty-six percent of people are against the healthcare overhaul and 44 percent favor it, according to the online poll conducted from Tuesday through Saturday.

Online polls are notoriously inaccurate but if they mean anything, the survey results suggest that Republicans are convincing voters to reject Obama's reform even though they like much of what is in it, such as allowing children to stay on their parents' insurance until age 26.

The one main sticking point with public is the “individual mandate” which forces all US residents to own some form of health insurance. According to the poll:

Sixty-one percent of Americans are against the mandate, the issue at the center of the Republicans' contention that the law is unconstitutional, while 39 percent favor it.

The mandate has always been a troublesome detail but without it, the healthcare reform is unlikely to have teeth. The problem is, without a mandate, its business as usual. A closer look at what the ACA actually says about the individual mandate provision. Built into the reforms are allowances for those who truly cannot afford to purchase health insurance.

For the purposes of the law, “individuals who can afford health-care insurance” is defined as people for whom the minimum policy will not cost more than 8 percent of their monthly income, and who make more than the poverty line. So if coverage would cost more than 8 percent of your monthly income, or you’re making very little, you’re not on the hook to buy insurance (and, because of other provisions in the law, you’re getting subsidies that make insurance virtually costless anyway).

The problem would therefore seem to be that people want high quality healthcare and simply don’t want to be forced to pay for it. But suppose cantankerous you
refuses to buy insurance and refuses to pay the annual $695 fine? Do agents come
to your home with official frowns? (Obama did not make the same mistakes that
Roosevelt made with the NRA with enforcement.)According the Washington Post,

The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine. If this actually leads to a world in which large numbers of people don’t buy insurance and tell the IRS to stuff it, Congress could change that. But for now, the penalties are low and the enforcement is non-existent.

The healthcare reforms would would affect about 26 million Americans who are currently uninsured. Those people are now relying on charities and government
programs to receive what little healthcare they can obtain. And a third of those
people can still qualify for Medicaid coverage with little or no cost and
another third would qualify for public subsidies to purchase insurance.
Altogether,

That leaves “about 7.3 million people—2 percent of the total population (3
percent of the population under age 65)— who are not offered any financial
assistance under the ACA and will be subject to penalties if they do not obtain
coverage.”

If the “individual mandate” is a thumbs down with the public, other
provisions in the healthcare reform have their appeal. For example overall support for the provisions of the healthcare law was strong, with a full 82 percent of survey respondents, for example, favoring banning insurance companies from denying coverage to people with pre-existing conditions. Also,

Sixty-one percent are in favor of allowing children to stay on their parents' insurance until age 26 and 72 percent back requiring companies with more than 50 employees to provide insurance for their employees.

Still despite those recommendations of public support, the voters are gradually being convinced by the advertising blitzkrieg. Unless President Obama can turn this tide, voters will soon vote in store-bought Republican candidates who have declared their intention to repeal the entire healthcare reform program at the behest of health care insurance corporations. A classic case of throwing the healthcare baby out with the individual mandate bathwater.

Even this could be excused if- and only if- the GOP opposition had actually made some attempt to negotiate, compromise or discuss the proposal during the healthcare discussion. No Republican supported Obama’s plan back then and, even now, so late in this political game, the Republican party- including its presumptive nominee-has presented no viable alternative to Obama’s plan.

And if the Supreme Court strikes down the law, or even part of it, the political repercussions will be impossible to predict. In theory, Congress could perhaps find a fix, a work-around to the mandate, but given the Republican obstructionism since 2010, that is highly unlikely. If nothing else, for many on both sides of the political spectrum, it will symbolize a complete breakdown of every branch of the government. The fact that the president can only win the support of the people through rebates-essentially by bribing them- is just an added humiliation for the country as a whole.

The most ironic part of it all is that Obama has publicly stated that this reform was based on the reforms implemented by Romney himself when he was governor of Massachusetts. Furthermore, while drafting the reforms, Obama drew heavily the legal arguments of Supreme Court Justice Antonin Scalia on interstate commerce in Gonzales v. Raich. Now, the judge is expected to rule against the constitutionality of the ACA on that very point, conveniently taking a different side than the one espoused in an earlier case.

All of these arguments by Scalia appear in the legal brief the Obama administration recently submitted to the Supreme Court in defense of the Patient Protection and Affordable Care Act. In fact, Scalia’s reasoning is cited extensively in order to bolster the government’s claim that the individual mandate is a perfectly legitimate exercise of congressional power.

"What happened to the Eighth Amendment? You really want us to go through these 2,700 pages? And do you really expect the Court to do that? Or do you expect us to -- to give this function to our law clerks? Is this not totally unrealistic? That we are going to go through this enormous bill item by item and decide each one?" Scalia asked Deputy Solicitor General Edwin Kneedler during Wednesday's health care reform hearings.

Meanwhile, in spite of this embarrassing parade of incompetence, according to the Kaiser Family Foundation, health care expenditures in the United States neared $2.6 trillion in 2010, over 10 times the $256 billion spent in 1980.

It seems as though America’s long boast about being the last superpower has come back to haunt it. Like a glitzy lifestyle, a real superpower status is expensive to maintain. It is more than maintaining a vastly overpriced military.

The problem, as with affordable healthcare that covers all citizens, everybody seems to like to benefits of Obama’s healthcare reforms but nobody wants to be forced to pay their small share of it. And according to the ads produced by the healthcare insurance industry, and according to their politicians for hire, the American public doesn’t need to.

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